Behind Trump’s South Korea deal, a plan to transform global shipbuilding

South Korea has pledged US$150 billion to help its shipbuilders enter the US market as part of its new trade deal with Washington, a move that could help America revive its shipbuilding industry and counter China’s dominance in the sector.

US President Donald Trump announced on Wednesday that the United States and South Korea had agreed a “full and complete” trade deal, which would see the US impose a 15 per cent tariff on South Korean goods and receive US$350 billion of investment from its Asian ally.

Shortly after, South Korean President Lee Jae-myung stated that US$150 billion of the promised investment would be dedicated to shipbuilding – an industry where South Korean firms are second only to China in global market share.

The capital would provide “solid support” for South Korean companies entering the US shipbuilding industry, Lee wrote in a Facebook post on Thursday. The wider US$350 billion investment package was intended to solidify bilateral cooperation in strategic industries, including semiconductors, he added.

Seoul clarified in a media briefing on Thursday morning that the promised funds would not come in the form of direct equity investments, but “will primarily consist of loans and guarantees”.

Earlier this week, local media outlets in South Korea reported that Seoul had proposed a multibillion-dollar project to Washington named “Make American Shipbuilding Great Again” during their trade negotiations, which would involve large-scale investments in the US by Korean shipbuilders and government financial support measures.